With the mega public offering of realty giant DLF around the corner and a lower rate of inflation for a few consecutive weeks easing off worries of any further interest rate hikes, shares of several real estate companies firmed up during the week.
Besides, robust results posted by Larsen and Toubro and Unitech’s announcement of bonus issue buoyed up investor interest in the sector.
“The results of L&T beat market expectations. Unitech’s announcement of a bonus issue has also created a feeling in the market that more players in the sector may take similar measures to retain investor interest ahead of the big bang issue from DLF,” said a BSE
While Larsen and Toubro reported a growth in fourth quarter 2007 net profit of over 50 per cent at Rs 700.77 crore on Tuesday, Unitech had announced a bonus issue of one share for each held on Monday. Reports say Unitech would soon hive off its hotel business into a separate company.
Further, as a corollary to the Rs 9,625-crore initial public offering (IPO) of DLF, investors expect a re-rating of companies in the real estate stocks.
A Reuter’s report quoting unnamed sources said on Friday that the order book for India's biggest-ever IPO (a $2.4 billion issue) by developer DLF was fully covered just days into a two-week global roadshow.
The DLF IPO is priced in the Rs 500-550 range.
While HB Estate Developers topped the sectoral pack surging 15.4 per cent during the week.
Other major gainers included Unitech, up Rs 21 or 3.83 per cent during to close Friday at Rs 568.50, Parsvanath Developers gained Rs 13.65 or 4.37 per cent to close the week at Rs 325.75, DS Kulkarni (up 3.7 per cent).
Major losers in the sector included Mahindra Gesco (down 3.4 per cent) and Shobha Developers.